Wednesday, 13 November 2013

THE DIPLOMATIC SHEIKH

Seeking to deflect attention from the economy, Rouhani is focusing on a deal abroad [Al Jazeera]

Hassan Rouhani's surprise victory in the June
14 elections, unleashed a wave of expectation and hope. Widely
considered a political outlier whose chief function was to lend
credibility to an electoral process that was struggling to recover from
the calamity of 2009, Rouhani's deft handling of the Iranian media, his
fluency in the debates and above all, his ability to tap into the
simmering discontent of the wider electorate all ensured that he became
the man to beat when Iranians went to the ballot box.

Drawing
powerful and arguably game-changing support from two of the three grand
old men of Iranian politics - Ali Akbar Hashemi Rafsanjani and Mohammad
Khatami - Rouhani was able to galvanise and unite a broad coalition of
centrists and reformists behind a policy platform of prudence and
change.

The
Supreme Leader, Ayatollah Ali Khamenei, faced with the prospect of an
elite revolt born of deep anxiety about former President Mahmoud
Ahmadinejad's political and economic legacy, was encouraged to let the
process follow through with minimal interference, though even he appears
to have been surprised at the strength of the public's feeling. Rouhani
thus won the election on the back of widespread discontent, not only in
the country at large, but among a broad alliance of the disaffected
elite, many of whom had no interest in any significant political change.
Rouhani may have campaigned as a reformist but he finds that he is
increasingly having to govern as a conservative. This is proving to be a
particularly difficult political balancing act, and unsurprisingly, in
some quarters, the lustre is beginning to wear off.

The problem Rouhani may have however, is that there are significant
sections of the conservative and hard-line elite that see sanctions
relief as the end, and not the means to a wider reform of the economy -
still less of politics - and that many Iranians have not yet fully
appreciated quite what a tangled web the current sanctions regime
represents.

To
better understand the problems that Rouhani faces, one can distinguish
three areas in which he has to operate: the economy; domestic reforms;
and building bridges internationally. In all three areas, his inheritance is a poor one.

Economic woes

Almost
all parties accept that the economy is in increasingly dire straits,
and as new ministers and officials begin to pour through the books - if
they exist at all - the real depth of the economic crisis is only now
becoming apparent. Even accounting for a degree of exaggeration, as all
succeeding governments have a tendency to do, it is quite clear that
economic mismanagement fuelled by dramatic increases in oil revenue over
the past eight years, and compounded by the most severe sanctions that
Iran has experienced in recent times, have significantly damaged the
economy. There is, to be sure, no shortage of liquidity in the Iranian
economy, but much of the money has been spent on patronage and
corruption, with a lamentable lack of infrastructural investment. The
government finds itself short of cash, with many essential goods
reportedly in short supply. According to some ministers, it may be
several years before they are able to turn things around. Indeed, some
have gone so far as to argue that the situation in some sectors,
including the oil industry is much worse than in the immediate aftermath
of the Iran-Iraq war.

However,
if all agree on the ailment, there is considerable disagreement as to
the cure. For many who had voted for Rouhani, the cure must be found
within, both in terms of economic and political reform. The economy has
failed because Ahmadinejad reinforced the tendency towards
unaccountability, and there was a lack of transparency in the
administration of government. A
key element of this was the abolition of the Plan and Budget
Organisation in 2007 - after more than half-a-century of existence -
which Rouhani to his credit, said he would re-establish. This reflects
his determination to repopulate the government with professionals and to
draw again on the technical expertise that Ahmadinejad tended to
dismiss. This can also be seen in the tenor of his administration and
the decision to reappoint experienced economists and technocrats to key
ministries in order to properly scrutinise Ahmadinejad's legacy, and to
begin to plan for a recovery.

But
beyond this economic focus, the trend has been for him to be highly
cautious, leaving many supporters frustrated with the apparent lack of
any immediate desire for political reform. There can be little doubt
that there are limits to what Rouhani could have achieved in his first
100 days, but his promises had created dramatic expectations, and his
swift attempts to dampen these down in the immediate aftermath of the
election have not gone down well.

Despite
encouraging signs with respect to the release of political prisoners,
this process has now stalled, while newspapers continue to be closed
with little tangible protest from the new government. Arguing with some
justification that his priority must be the economy, Rouhani has
deployed most of his attention, not on the structural weaknesses at home
- which inevitably will take some time to see results - but on the
possibilities of a quick fix abroad.

Given
the nature of Iran's economy, one can see why the new government has
decided to seek some sort of solution abroad. Both Rafsanjani, and more
obviously, Khatami became unravelled seeking to address the structural
problems in the economy, and while these remain at the heart of Iran's
problems, they are more profound now in the aftermath of eight years of
mismanagement. Sanctions relief therefore offers one route out that may
provide a much needed boost to the economy, sustain the sense of hope
generated from the election, defer the need for more difficult
decisions, but also create the space needed for the decisions to be made
in due course.

The
problem Rouhani may have however, is that there are significant
sections of the conservative and hard-line elite that see sanctions
relief as the end, and not the means to a wider reform of the economy - still less of politics -
and that many Iranians have not yet fully appreciated quite what a
tangled web the current sanctions regime represents. Those ministers who
have noted that sanctions relief may take some time, have largely been
marginalised from the front stage of political discourse; such language
does not play well to a public in urgent need of good news.

Indeed, the present strategy appears to be to maintain a conservative approach at home and reformist one abroad.

Look to the West

On
the international front, of course, Rouhani has been remarkably
successful, perhaps even too successful for his own good. The charm
offensive that began with his campaign and culminated with his
celebrity-style visit to the United Nations, is ample testament to the
Iranian mastery of public relations and an impressive ability to reframe
the argument, when they decide to put their minds to it. The
appointment of Javad Zarif as Foreign Minister was a stroke of genius in
this particular respect. Fluent in both the language and culture of the
United States, Zarif prudently arrived early to prepare the stage for
the president's arrival. The resulting performance - a tour de force and
a much needed antidote to the Ahmadinejad years - did not disappoint
and the receptiveness of his American hosts ensured that even the
awkward moments were largely skated over. It ended with the now famous
phone conversation between Rouhani and US President Barack Obama as the
former headed to the airport.

This
crowning moment inadvertently exposed some of the very real problems
that need to be overcome with respect to the complex vested interests
that feed into policy on either side. Both sides are acutely aware of
being charmed into giving away too much. Curiously, with the dominance
of the Supreme Leader as the final arbiter and decision-maker in the
Islamic Republic, one might think, given his general approval of the
process now taking place, that Rouhani's position would be stronger than
that of Obama, faced as he is with a Congress that can effectively (and
constitutionally) constrain him. But, quite apart from the difficulty
of reading Khamenei's intentions and the position of his red lines
(Khamenei has maintained a suitably supportive if skeptical posture to
date), he, too, has pressures on his position coming from elite factions
whose dislike of Ahmadinejad and the US is barely distinguishable, and
are determined to hold Khamenei to his stated world view and the status
quo in which they have built up a lucrative vested interest. Khamenei,
in short, faces a few paradoxes of his own.

For
Rouhani, keeping these particularly hard-line factions content, in
light of the promises made during the election, is proving to be
especially problematic. Indeed, the present strategy appears to be to
maintain a conservative approach at home and reformist one abroad. This
might not have been such a problem had extensive promises not been made
during the election, with a view to getting the vote out. The
calculation, however, seems to have been made that it is easier to
disappoint the reformists than to confront the conservatives, and the
latter have certainly been keen to show that they remain a very real
force to reckon with. The paradox is that Rouhani needs a united front
at home to strengthen his hand in negotiations abroad, but he needs a
relatively generous agreement abroad to take the country with him. But,
in order to get the sort of sanctions relief that will make a
difference, he will need to concede more than many, including Khamenei,
will be willing to consider.

Not
for the first time, an Iranian politician is looking overseas to
reinforce his position at home, yet this very concentration abroad is
causing consternation among contradictory political tendencies at home.
It will take considerable courage and all the skills of the "diplomatic sheikh" to navigate this complex web of vested interests.

Ali
M Ansari is Professor of Iranian History and Director of the Institute
for Iranian Studies at the University of St Andrews; Senior Associate
Fellow, Royal United Services Institute; Vice President of the British
Institute for Persian Studies. He is also Editor of the Cambridge History of Iran Vol 8 (The Islamic Republic).

The views expressed in this article are the author's own and do not necessarily reflect Al Jazeera's editorial policy.